Perhaps it is a reflection of age, but my impression is that empirical studies in economics are increasingly useless. Here is the full abstract of one example, from the ‘I can’t believe they needed to run a regression for this’ school:
As one of the dimensions of vulnerability, this paper empirically investigates the inability of rural dwellers to cope with negative income shocks. A variable coefficient regression model is applied to a two-period household panel dataset collected in the North-West Frontier Province, Pakistan, an area with high incidence of income poverty and low human development. The empirical model allows for a different ability to smooth consumption, approximated by a linear function of households’ attributes, and controls for the endogeneity of observed changes in income, using qualitative information on subjective risk assessment. Estimation results show that the ability to cope with negative income shocks is lower for households that are aged, landless and do not receive remittances regularly.
Takashi Kurosaki, “Consumption Vulnerability to Risk in Rural Pakistan”, Journal of Development Studies 42:1 (January 2006), pp. 70-89.
I don’t understand how this paper passed peer review. Perhaps it was thanks to a neat mathematical model ‘explaining’ changes in individual consumption as a function of changes in aggregate (village) income and changes in individual income:
Measurement of risk sharing among villagers sounds useful, but there is unfortunately no further mention of risk sharing in the paper.
The author is Professor of Japanese and Asian Economies at the Institute of Economic Research, Hitotsubashi University, Tokyo.
HT: Christopher Willmore
Econometrics is the worst. Maybe you’ve heard this one: 3 guys go deer hunting and spot a deer. One fires and misses a foot to the left. Another fires and misses a foot to the right. The third fires straight up into the air and exclaims “We got him!”